{"id":14650,"date":"2018-04-12T15:13:58","date_gmt":"2018-04-12T19:13:58","guid":{"rendered":"https:\/\/www.datamyne.com\/?p=14650"},"modified":"2022-05-03T12:05:03","modified_gmt":"2022-05-03T16:05:03","slug":"u-s-china-trade-tariffs","status":"publish","type":"post","link":"https:\/\/www.datamyne.com\/knowledge-center\/trade-policy\/u-s-china-trade-tariffs\/","title":{"rendered":"U.S. Tariffs on Chinese Goods: Overview and Timeline"},"content":{"rendered":"

The world\u2019s leading trade partners, the U.S. and China, are implementing tariffs on a growing list of goods. With new U.S. tariffs on Chinese goods, companies that rely on imports or exports need solutions to keep pace with wide-ranging, rapid-fire changes in the costs of doing business. \u00a0\u00a0\u00a0<\/strong><\/p>\n

Here\u2019s the timeline to date:<\/p>\n

January 22.<\/strong> The U.S. Trade Representative announces safeguard tariffs on solar panels and washing machines, as authorized under Section 201 of the Trade Act of 1974, to provide the domestic industry relief from import surges. The tariffs apply to imports of from all sources (with washers from Canada excepted) \u2013 but China is a top country of origin for both. [See U.S. Deploys Protective Tariffs<\/a>.]<\/p>\n

March 8.<\/strong> President Trump issues two proclamations imposing tariffs on aluminum and steel imports. In this case, the authority invoked is Section 232 of the Trade Act, aimed at providing trade relief in the interest of national security. Initially, only imports from NAFTA partners Canada and Mexico are exempt from these tariffs. But before the March 23<\/strong> effective date, temporary exemptions are extended to Australia, Argentina, Brazil, South Korea, and the EU nations. [See Market Changers: U.S. Section 232 Aluminum and Steel Tariffs<\/a>.]<\/p>\n

March 22. <\/strong>Citing the findings of an investigation into China\u2019s policies on technology transfer and intellectual property<\/a>, conducted by the U.S. Trade Representative under Section 301 of the Trade Act, President Trump on directs the USTR<\/a> to increase tariffs on selected goods from China worth some $50 billion in trade value. The USTR is also to initiate trade dispute proceedings at the World Trade Organization. At the same time, the Secretary of the Treasury is directed to propose action addressing concerns about Chinese investment in U.S. industries or technologies.<\/p>\n

March 23. <\/strong>China\u2019s Ministry of Commerce announces<\/a> lists containing 128 U.S. exports that would be subject to punitive taxes \u201cto balance losses\u201d resulting from the U.S. aluminum and steel tariffs. Effective April 2<\/strong>, China imposes 15% duties on 120 products from the U.S. including steel pipes, fruits, nuts, and wines, as well as 25% duties on eight HS codes covering pork and aluminum scrap.<\/p>\n

April 3.<\/strong> As directed by the president on March 22, the USTR releases its list of some 1,300 imports from China<\/a>, identified by 8-digit harmonized tariff schedule (HTS) codes, that are to be subject to Section 301 tariffs. The public is invited to comment on the proposed tariffs. Comments can be submitted and are available for viewing at regulations.gov<\/a> under docket number USTR-2018-0005. Comments are due by May 11. A public hearing will be held May 15.<\/p>\n

April 4.<\/strong> Responding to the U.S. proposed list of 1,300 Chinese exports, China is reported<\/a> to have put together a second list of 106 U.S. products that it plans to hit with a 25% tariff. This line-up includes soybeans, chemicals, aircraft and automobiles.<\/p>\n

April 5. <\/strong>President Trump says<\/a> he has asked the USTR to identify a second batch of tariffs on an additional $100 billion in imports from China. Meanwhile, China announces<\/a> its intention to appeal to the WTO dispute settlement mechanism for the U.S. practices.<\/p>\n

April 9. <\/strong>President Xi Jinping repeats a pledge<\/a> to significantly lower China\u2019s 25% tariff on imported cars. While markets are encouraged that this signals a de-escalation in trade tensions, skeptics point out that China has failed to act on the pledge first made last year. As the Washington Post reports<\/a>, the official word from China is that it will open its markets to serve its own interests, not in response to outside pressure.<\/p>\n

U.S., China Trade Tariffs, Differ on Tactics<\/h2>\n

The U.S. Section 232 tariffs imposed in March home in on two strategic commodities whose markets have been distorted by global overcapacity: steel and aluminum.<\/p>\n

In contrast, the proposed Section 301 tariffs are aimed at 1,333 separate products across a range of categories: organic and inorganic chemicals; pharmaceuticals; medical and dental devices and equipment; miscellaneous chemicals (antifreeze and de-icing preparations); articles of rubber; iron, steel and aluminum products (some already subject to the Section 232 tariffs); energy generating equipment, engines, motors, pumps, compressors, appliances, and industrial machinery (and parts thereof); electronic devices and media; trains, planes and boats, cars and trucks; artillery, weapons and munitions.<\/p>\n

The wide-ranging list of targets was assembled by government trade analysts charged with identifying the imports that benefit from Chinese industrial policies … but are least likely to disrupt the U.S. economy.<\/p>\n

The list was also scrubbed of Chinese imports whose loss would be most keenly felt by U.S. consumers \u2013 that explains why such mainstays of U.S.-China trade as apparel, footwear, smartphones, tablets, video games, toys, and furniture are NOT on the list.<\/p>\n

This approach applies to selecting HTS codes within product categories. For example, electric storage batteries would be candidates for Section 301 tariffs since the Chinese government has made development of its energy storage industry a strategic priority<\/a>. Indeed, HTS 85073080, nickel cadmium batteries, other than those used for electric vehicles, is on the U.S. tariff list. But this type of battery is well down the ranks of U.S. imports of electric storage batteries overall, and accounts for a sliver of U.S. battery imports from China, as the charts illustrate:<\/p>\n

\"U.S.,<\/a><\/p>\n

\"U.S.,<\/a><\/p>\n

A tariff on lithium ion (Li-ion) batteries might hurt China\u2019s exports more \u2013 but would also exact a bigger toll on downstream users in the U.S. Further, China supplied 41% of Li-ion batteries imported by the U.S. last year, compared with 28% of nickel-cad imports.<\/p>\n

Looking over the Section 301 tariff list, we found only 445 of 1,333 targeted codes among the top 2,000 U.S. imports from China in 2017. Number one on the list is flat panel color televisions incorporating recording apparatus with video display diagonals exceeding 34.29 cm. Here are the top 10 ranked by value of import trade in 2017:<\/p>\n

\"U.S.-China<\/a><\/p>\n

By comparison, China has aimed its retaliatory tariffs at fewer, but more valuable trade targets.<\/p>\n

China has also paid special attention to U.S. agricultural exports. The first round of tariffs, imposed April 2 in response to U.S. tariffs on aluminum and steel, includes one aluminum product (scrap), 33 steel products (pipes and tubing), and 95 agricultural products \u2013 including fruits, nuts, wines and pork, together accounting for $1.1 billion in U.S. exports in 2017.<\/p>\n

The new list of potential tariffs being readied by China covers 42 types of chemicals, 28 categories of passenger and other vehicles and their parts, liquefied propane and lubricating oil. It also adds 33 agricultural products, including cotton, sorghum, DDGs, wheat, beef products, orange juice, whiskies, tobacco products … and soybeans.<\/p>\n

Soybeans (HTS 120190) are third-ranked among U.S. exports, and the top U.S. agricultural export, valued at $21.3 billion in 2017.\u00a0 China is the top destination for U.S. soybeans with a 57.8% share last year, well ahead of second-ranked Mexico, which received 7.5%.<\/p>\n

The stepped up pressure on agri exports has concerned U.S. farmers, as Reuters reports<\/a>. According to our China trade data, the U.S. was the leading source for China\u2019s soybean imports as recently as 2012, but has steadily ceded share to Brazil, which claimed 53% of this market against the U.S. share of 35%.<\/p>\n

China is also the biggest market for U.S. aircraft with 13.4% share, and mid-size cars (HTS 870323) with 35% share. As the table shows, China\u2019s second round of tariffs, should they become effective, will hit the country\u2019s top imports from the U.S.<\/p>\n

\"U.S.-China<\/a><\/p>\n

Plainly, it\u2019s not only the farmers who have cause to worry about the U.S.-China trade tariffs. Any company that relies on cross-border supply chains or overseas sales needs to track and be ready to respond to the tariffs, taxes and sanctions that are roiling global markets. Our trade content solutions can help \u2013 just ask us<\/a>.<\/p>\n

Related:<\/strong><\/p>\n

From our blog:<\/strong><\/p>\n